(Incorporates earnings from Quebecor, changes slug; adds
analyst comments, byline)
By Alastair Sharp
TORONTO May 8 Telus Corp, one of
Canada's largest telecommunications companies, churned out
another solid quarter of earnings growth on Thursday, raising
its dividend on wireless strength and further expansion of its
Internet-based television product, Optik.
Meanwhile, regional operator Quebecor Inc handed
in a mixed report card, with customer losses in cable TV and
telephony and slow growth in Internet.
Quebecor was still able to beat profit expectations, with a
37 percent jump in adjusting income from continuing operations
to C$49.3 million, or 40 Canadian cents a share. Revenue was up
slightly at C$1.04 billion.
Quebecor bought wireless airwaves across much of the country
earlier this year, but currently only offers its services -
cable TV, Internet, landline and mobile telephony - in its home
province of Quebec.
Vancouver-based Telus competes against cable company Shaw
Communications Inc for landline telephone, television
and Internet customers in Western Canada, and against Rogers
Communications Inc and BCE Inc's Bell among
others for wireless subscribers nationally.
"Telus is clearly still taking significant high margin
broadband share from Shaw, as well as TV share," Canaccord
Genuity analyst, Dvai Ghose wrote in a note, adding the company
trades on par with Bell, Shaw and Rogers despite
industry-leading operational growth and dividends. "Telus
remains our top pick."
Telus said Thursday it signed up 48,000 net contract
wireless subscribers, who typically pay more to use high-end
smartphones. By comparison, Bell and Rogers signed up almost
34,000 and just 2,000 such customers respectively, in the same
Telus said its average wireless customer paid C$61.24 a
month for service, compared to Bell's C$57.90 and Rogers at
C$57.63. Telus' numbers did not include customers of Public
Mobile, a budget operator Telus recently acquired.
The company added 27,000 TV customers and 21,000 Internet
subscribers in the quarter, helping its landline unit post an
increase in revenue despite facing industry-wide decline in
voice telephony demand.
Quebecor meanwhile leaned on cost-cutting and asset sales to
A surprising slip in total landline subscribers was "likely
reflecting accelerated substitution effects, service maturation,
expanding IPTV footprints and perhaps some election-related
disruption," RBC Capital Markets analyst Drew McReynolds wrote.
Quebecor's executive ranks have been rumbled in recent
months, with controlling shareholder Pierre Karl Péladeau
stepping away to represent the separatist Parti Québécois in a
provincial election. His lieutenant, Robert Dépatie, stepped
down as CEO of Quebecor and Videotron soon after due to health
Françoise Bertrand was named Videotron CEO on Wednesday,
while Pierre Dion had previously replaced Dépatie at the helm of
the parent company.
Shares in Telus moved 0.3 percent higher to C$39.56 in
morning trade on the Toronto Stock Exchange, while Quebecor
slipped 0.2 percent to C$26.05.
Telus said its net income rose 4 percent to C$377 million,
or 61 Canadian cents a share in the three months to the end of
March, compared with C$362 million, or 56 cents a share, a year
Operating revenue rose 5 percent to C$2.90 billion.
Excluding acquisition costs, Telus earned 62 cents a share.
Analysts had on average expected Telus to earn 61 Canadian
cents a share on revenue of C$2.87 billion, according to Thomson
Telus said it planned to increase its dividend by 2 cents to
38 cents, payable on July 2 to shareholders as of June 10, as
part of its long-term dividend growth plan.
(Reporting by Alastair Sharp; Editing by Sofina Mirza-Reid)